HMRC deadline approaching as millions risk £100 fine from tomorrow

HMRC's Self Assessment deadline is midnight tonight, January 31. Those who fail to meet the deadline are risking a hefty £100 fine.

From tomorrow, February 1, automatic penalties will apply for people who haven't paid the tax owed to HMRC. Among those who need to file self-assessment tax returns are self-employed workers, high earners and certain parents. The majority of UK taxpayers have taxes deducted automatically from wages, pensions or savings, and won't need to file a tax return.

Tax returns are due from individuals or businesses that haven't had tax automatically deducted, or that have earned extra untaxed income. There are many reasons you may need to submit a tax return for the 2023/2024 tax year (April 6 2023 to April 5 2024):

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• You were self-employed and your income was more than £1,000. If you earned £1,000 or less, you may still need to do a self-assessment if you want to pay 'class 2' National Insurance contributions voluntarily

• You claimed Child Benefit when you or your partner earned more than £50,000 a year. This is known as the high income Child Benefit charge

• You earned £10,000 or more before tax from savings interest, investments, shares or dividends

• You earned money from renting out property or from other untaxed income, such as tips or commission

• You earned income from abroad

• You need to pay Capital Gains Tax

• You received income from a trust

• You filed a self-assessment tax return for the 2022/23 tax year

Alongside a fine of up to £100 for missing the deadline you'll have to pay an annual interest charge of 7.25% of the amount owed. This interest will apply daily, starting immediately on 1 February. After 30 days you'll then also be fined an extra 5% of the unpaid tax on top. This late fee is then repeated at six months and 12 months.

If you're unable to pay your dues, HMRC advises contacting them as soon as possible. You may be able to set up a payment plan which will spread the cost over time and avoid penalty fees.

This is known as a Time to Pay arrangement. To arrange this, you'll need the relevant reference number for the tax you can't pay, such as your unique tax reference number, as well as your UK bank account details where you're authorised to set up a Direct Debit.

According to the Gov.uk. website, "You’ll usually be asked to pay around half of what you have left over each month towards the tax you owe. You can also agree to pay more if you want."